Global Capital and National Governments (Cambridge Studies in Comparative Politics)

Global Capital and National Governments, first published in 2003, suggests that international financial integration does not mean the end of social democratic welfare policies. Capital market openness allows participants to react swiftly and severely to government policy; but in the developed world, capital market participants consider only a few government policies when making decisions. Governments that conform to capital market pressures in macroeconomic areas remain relatively unconstrained in supply-side and micro-economic policy areas. Therefore, despite financial globalization, cross-national policy divergence among advanced democracies remains likely. Still, in the developing world, the influence of financial markets on government policy autonomy is more pronounced. The risk of default renders market participants willing to consider a range of government policies in investment decisions. This inference, however, must be tempered with awareness that governments retain choice. As evidence for its conclusions, Global Capital and National Governments draws on interviews with fund managers, quantitative analyses, and archival investment banking materials. This book examines the degree to which international financial markets affect governments' policy choices. It provides empirical evidence as to whether financial globalization creates pressures on governments of developed and developing nations to pursue similar policies and to reduce spending on social policies. The book suggests that financial globalization does not lead to a "race to the bottom" among governments, especially in developed nations. It deploys several types of evidence; the most unique are interviews and surveys of investment fund managers. It also compares contemporary government-financial market relations to those prior to World War I. When throngs of protestors mobilized around the Free Trade Area of the Americas (FTAA) summit in Quebec, the World Bank/International Monetary Fund (IMF) meetings in Washington and Prague, and the World Trade Organization (WTO) ministerial meetings in Seattle, their target was economic globalization. This book, first published in 2003, examines the degree to which international financial markets affect governments' policy choices Layna Mosley. Includes Bibliographical References (p. 339-372) And Index.